John Whitehead's Commentary
Rising Gas Prices: How to Fight Back
I have a friend whose story should be shocking. Instead, it is quickly becoming the norm.
On her way home from work last Friday, she stopped at Sam's Club for groceries and gas. She ran inside and less than a half hour later was filling up at the pump. But it seems that she should have gotten the gas first because it had gone up twenty-five cents a gallon in the few minutes it took her to grab a few groceries.
As anyone who has to rely on an automobile for transportation knows, gasoline prices have soared in recent weeks. And some prognosticators are warning that by next summer, they could reach $4.00 a gallon.
But rising gas prices affect us in many other ways. Since most American cities rely on cross-country truck delivery of food and other goods, when the price of gas goes up, so do the consumer's costs. And it's not just transportation and agriculture that are largely dependent on abundant, cheap oil. Modern medicine, water distribution and national defense are predominantly powered by oil and petroleum-derived chemicals. Also, many of the consumer goods we buy are made with plastic, which is derived from oil. In addition, all electrical devices--including solar panels and windmills--make use of silver, copper and/or platinum, all of which are discovered, extracted, transported and fashioned using oil-powered machinery.
The U.S. government is blaming the steep gas prices on the war in Iraq, a limited supply of oil and blah, blah, blah. But absent last year's hurricane damage or oil shortage, we have to look elsewhere. The volatility of crude oil prices, which have doubled in the last two years, is supposedly the driving force behind the rise in gas prices. Economists fear the tenuous state of the market, acknowledging that there is no room for disaster or a mistake this year. And the routine shutdown of some oil refineries to address maintenance and repairs that linger from hurricane damage or were postponed in the oil crisis after the hurricane could have a large effect on the supply needed in the busy summer months. Growing demand, high crude oil costs, requirements for low-sulfur gasoline and greater demand for corn-based ethanol as an additive are also expected to keep consumer prices for motor fuels high. The high prices, however, are not expected to dampen the demand during the April-September heavy driving season. Motorists are expected to use an average 9.4 million barrels of gasoline a day, or 1.5 percent more than last summer.
With consumer driving habits unaltered and prices edging higher daily, the sluggish U.S. Congress has taken some action. The Senate Judiciary Committee recently introduced a bill that would increase competition in the oil and gas industries, therefore reducing the monopolies and large profit margins currently enjoyed by several giant companies.
But who is really to blame here? Chrysler's chief spokesman, Jason Vines, recently took a swipe at Big Oil, stating, "Big Oil would rather fill the pockets of its executives and shareholders rather than spend sufficient amounts to reduce the price of fuel, [therefore] letting consumers... pick up the tab." Referring to a recent Exxon Mobil ad that blamed auto companies for the rising price of gas, Vines said, "Despite a documented history of blowing their exorbitant profits on outlandish executive salaries and stock buybacks, and hoarding their bounty by avoiding technologies, policies and legislation that would protect the population and environment and lower fuel costs, Big Oil insists on transferring all of that responsibility on the auto companies."
Nearly all American auto companies are losing money, while the oil giants are raking in record profits. The sharp rise in gas prices has severely lessened demand for the auto industry's most profitable vehicles such as SUVs. Now that the auto industry is taking a large hit with the ever-increasing prices, auto executives are ready to fight back against greedy oil giants.
Exxon Mobil leads the world's oil companies in profits but has also set a record for both quarterly profits and overall net income. Profits for the fourth quarter reached $10.7 billion and yearly totals exceeded $36 billion, up nearly thirty-one percent from the previous year.
What can be done? Big oil has us over a barrel, so to speak, but we can fight back. There is a movement slowly building to boycott big oil. To quote from a recent e-mail: "For the rest of the year, don't purchase any gasoline from the two biggest companies (which now are one), Exxon and Mobil. If they are not selling any gas, they will be inclined to reduce their prices. If they reduce their prices, the other companies will have to follow suit."
Sounds good to me. Join the resistance!
On her way home from work last Friday, she stopped at Sam's Club for groceries and gas. She ran inside and less than a half hour later was filling up at the pump. But it seems that she should have gotten the gas first because it had gone up twenty-five cents a gallon in the few minutes it took her to grab a few groceries.
As anyone who has to rely on an automobile for transportation knows, gasoline prices have soared in recent weeks. And some prognosticators are warning that by next summer, they could reach $4.00 a gallon.
But rising gas prices affect us in many other ways. Since most American cities rely on cross-country truck delivery of food and other goods, when the price of gas goes up, so do the consumer's costs. And it's not just transportation and agriculture that are largely dependent on abundant, cheap oil. Modern medicine, water distribution and national defense are predominantly powered by oil and petroleum-derived chemicals. Also, many of the consumer goods we buy are made with plastic, which is derived from oil. In addition, all electrical devices--including solar panels and windmills--make use of silver, copper and/or platinum, all of which are discovered, extracted, transported and fashioned using oil-powered machinery.
The U.S. government is blaming the steep gas prices on the war in Iraq, a limited supply of oil and blah, blah, blah. But absent last year's hurricane damage or oil shortage, we have to look elsewhere. The volatility of crude oil prices, which have doubled in the last two years, is supposedly the driving force behind the rise in gas prices. Economists fear the tenuous state of the market, acknowledging that there is no room for disaster or a mistake this year. And the routine shutdown of some oil refineries to address maintenance and repairs that linger from hurricane damage or were postponed in the oil crisis after the hurricane could have a large effect on the supply needed in the busy summer months. Growing demand, high crude oil costs, requirements for low-sulfur gasoline and greater demand for corn-based ethanol as an additive are also expected to keep consumer prices for motor fuels high. The high prices, however, are not expected to dampen the demand during the April-September heavy driving season. Motorists are expected to use an average 9.4 million barrels of gasoline a day, or 1.5 percent more than last summer.
With consumer driving habits unaltered and prices edging higher daily, the sluggish U.S. Congress has taken some action. The Senate Judiciary Committee recently introduced a bill that would increase competition in the oil and gas industries, therefore reducing the monopolies and large profit margins currently enjoyed by several giant companies.
But who is really to blame here? Chrysler's chief spokesman, Jason Vines, recently took a swipe at Big Oil, stating, "Big Oil would rather fill the pockets of its executives and shareholders rather than spend sufficient amounts to reduce the price of fuel, [therefore] letting consumers... pick up the tab." Referring to a recent Exxon Mobil ad that blamed auto companies for the rising price of gas, Vines said, "Despite a documented history of blowing their exorbitant profits on outlandish executive salaries and stock buybacks, and hoarding their bounty by avoiding technologies, policies and legislation that would protect the population and environment and lower fuel costs, Big Oil insists on transferring all of that responsibility on the auto companies."
Nearly all American auto companies are losing money, while the oil giants are raking in record profits. The sharp rise in gas prices has severely lessened demand for the auto industry's most profitable vehicles such as SUVs. Now that the auto industry is taking a large hit with the ever-increasing prices, auto executives are ready to fight back against greedy oil giants.
Exxon Mobil leads the world's oil companies in profits but has also set a record for both quarterly profits and overall net income. Profits for the fourth quarter reached $10.7 billion and yearly totals exceeded $36 billion, up nearly thirty-one percent from the previous year.
What can be done? Big oil has us over a barrel, so to speak, but we can fight back. There is a movement slowly building to boycott big oil. To quote from a recent e-mail: "For the rest of the year, don't purchase any gasoline from the two biggest companies (which now are one), Exxon and Mobil. If they are not selling any gas, they will be inclined to reduce their prices. If they reduce their prices, the other companies will have to follow suit."
Sounds good to me. Join the resistance!
ABOUT JOHN W. WHITEHEAD
Constitutional attorney and author John W. Whitehead is founder and president of The Rutherford Institute. His most recent books are the best-selling Battlefield America: The War on the American People, the award-winning A Government of Wolves: The Emerging American Police State, and a debut dystopian fiction novel, The Erik Blair Diaries. Whitehead can be contacted at staff@rutherford.org. Nisha Whitehead is the Executive Director of The Rutherford Institute. Information about The Rutherford Institute is available at www.rutherford.org.
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